TerraForm Global (NASDAQ: GLBL) and Azure Power Global (NYSE:AZRE) are both small-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Valuation and Earnings

This table compares TerraForm Global and Azure Power Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TerraForm Global $229.19 million 2.48 $95.66 million ($0.55) -9.14
Azure Power Global $78.86 million 4.94 $55.28 million ($2.39) -6.28

TerraForm Global has higher revenue and earnings than Azure Power Global. TerraForm Global is trading at a lower price-to-earnings ratio than Azure Power Global, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for TerraForm Global and Azure Power Global, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TerraForm Global 0 1 1 0 2.50
Azure Power Global 0 0 3 0 3.00

TerraForm Global presently has a consensus target price of $5.00, suggesting a potential downside of 0.50%. Azure Power Global has a consensus target price of $22.00, suggesting a potential upside of 46.57%. Given Azure Power Global’s stronger consensus rating and higher probable upside, analysts clearly believe Azure Power Global is more favorable than TerraForm Global.

Insider & Institutional Ownership

76.8% of TerraForm Global shares are owned by institutional investors. Comparatively, 43.1% of Azure Power Global shares are owned by institutional investors. 0.5% of TerraForm Global shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares TerraForm Global and Azure Power Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TerraForm Global -26.87% -6.15% -2.90%
Azure Power Global -18.15% -9.96% -1.76%

TerraForm Global Company Profile

TerraForm Global, Inc. is a holding company. The Company is a diversified renewable energy company that owns contracted solar and wind power plants. The Company operates through two segments: Solar Energy and Wind Energy. The segments include the Company’s entire portfolio of power plants. The Company’s portfolio consisted of solar and wind power plants located in Brazil, China, India, Malaysia, South Africa, Thailand and Uruguay with an aggregate net capacity of 916.4 megawatts (MW) as of October 31, 2016. The Company’s solar and wind power plants include Salvador, Bahia, Dunhuang, Honiton, NSM 24, Focal, NSM Suryalabh, NSM Sitara, NSM L’Volta, Millenium, Brakes, Raj 5, ESP Urja, Azure, Hanumanhatti, Gadag, Bhakrani, Silverstar Pavilion, Fortune 11, Corporate Season, Boshof, Witkop, Soutpan and PP Solar.

Azure Power Global Company Profile

Azure Power Global Limited is an India-based power producer. The Company sells solar power in India on long term fixed price contracts to its customers. The Company is also developing micro-grid applications for the highly fragmented and underserved electricity market in India. The Company operates approximately 20 utility scale projects and several commercial rooftop projects with a combined rated capacity of approximately 240 megawatts. The Company’s services include design, engineering and construction of grid integrated solar installations; off grid solar installations for villages, hamlets and remote areas; turnkey solar installations for commercial and residential complexes on roof tops, as back up and alternate source, and operation and maintenance of solar installations. The Company’s projects include Project Punjab, Rajasthan Projects, Gandhinagar Smart City Rooftop Project and Micro-Grids in Bihar and Uttar Pradesh.

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